Two Men Sentenced for Running
International Pornographic Spamming Business

WASHINGTON – Two men have been sentenced to more than five years in prison for
organizing and running an international pornographic spamming business that
grossed over $1 million, Assistant Attorney General Alice S. Fisher of the
Criminal Division and Interim U.S. Attorney Dan G. Knauss of the District of
Arizona announced today.

Jeffrey A. Kilbride, 41, of Venice, Calif., and James R. Schaffer, 41, of
Paradise Valley, Ariz., were sentenced by U.S. District Judge David G. Campbell
of the District of Arizona in a hearing that began on Sept. 24, 2007, and
concluded yesterday. Kilbride was sentenced to 72 months in prison and Schaffer
was sentenced to 63 months in prison. Kilbride received a higher sentenced
based on the court’s finding that he had obstructed justice by attempting to
prevent a government witness from testifying at trial. Kilbride and Schaffer
were fined $100,000 and ordered to pay $77,500 in restitution to AOL Inc. Judge
Campbell also ordered the defendants to jointly forfeit more than $1.1 million,
the amount of illegal proceeds from their spamming operation.

On June 25, 2007, a federal jury in Phoenix convicted Kilbride and Schaffer on
eight counts including: violating the Controlling the Assault of Non-solicited
Pornography and Marketing (CAN-SPAM) Act of 2003 by sending spam messages using
falsified headers and domain names, conspiracy, fraud, money laundering, and
various obscenity charges. The three-week trial was the first to include charges
under the CAN-SPAM Act of 2003, a law designed to crack down on the transmission
of pornography in commercial bulk unsolicited electronic mail messages.

Beginning in 2003, Kilbride and Schaffer established a spamming operation in the
United States. Their business model consisted of sending millions of
unsolicited email messages which advertised commercial Internet hard-core
pornography Web sites. Kilbride and Schaffer earned a commission for each
person they caused to subscribe to one of these Web sites. Hard-core
pornographic images were embedded in each email they sent and were visible to
any person who opened the email. In late 2003, after the CAN-SPAM Act was
passed, Kilbride and Schaffer took steps to relocate their criminal enterprise
abroad in an attempt to evade prosecution. By remotely logging in to servers
located in Amsterdam, the men were able to make it appear that the messages they
were sending originated abroad, when they were actually being sent from Phoenix.

At Kilbride and Schaffer’s trial, eight citizens traveled from Massachusetts,
Texas, Iowa, California and Arizona to testify about the context in which their
families, including some children, received the pornographic spam messages. In
all, AOL and the FTC received over 1.5 million complaints from spam recipients,
including some who had set parental controls to protect their children from
accessing graphic sexual content. The evidence at trial established that the
defendants falsified header information and domain names of the messages they
sent by creating a fictitious employee at a shell corporation in the Republic of
Mauritius, in order to hide their criminal conduct. Further, Kilbride and
Schaffer used bank accounts in the Republic of Mauritius and the Isle of Man to
receive and funnel the proceeds from the operation and to further insulate
themselves from detection by U.S. law enforcement.

Kilbride and Schaffer engaged in this criminal conspiracy for more than a year
with three co-conspirators: Jennifer Clason, 32, of Tempe, Ariz.; Andrew
Ellifson, 31, of Scottsdale, Ariz.; and Kirk Rogers, 43, of Manhattan Beach,
Calif. Clason, Ellifson, and Rogers have pleaded guilty for their roles in the
scheme and testified against Kilbride and Schaffer.

The case was prosecuted by Trial Attorneys Jill Trumbull-Harris and Bonnie Kane
of the Child Exploitation and Obscenity Section (CEOS) of the Criminal Division,
with assistance and support provided by Assistant U.S. Attorney John R. Lopez IV
of the District of Arizona. Former CEOS Trial Attorney Kayla Bakshi also
participated in the trial of the case. The investigation was conducted by the
Federal Bureau of Investigation and CEOS’ High Tech Investigative Unit.